The lights will stay on, but at a cost

12 March 2015

The Government has managed to "keep the lights on", but buying in extra 'safety net' capacity at short notice has brought costs for the taxpayer and the environment, concludes a Lords report out today.

The House of Lords Science and Technology Committee declares that the Government should not be congratulated on keeping the lights on. Its report, entitled 'The Resilience of the Electricity System', says it is not acceptable for an advanced economy, hugely dependent on electricity, to sail so close to the wind. It found that we have been forced to generate extra capacity in the system, using expensive measures with heavy reliance on fossil fuel generation. The report urges the Government to improve its long-term planning to avoid squeezing the capacity margin like this.

During its inquiry, the Committee also heard that demand for electricity has declined substantially since the economic crisis began. If demand had continued to grow, the situation could have been much worse.

The report also warns that the electricity system's increasing dependence on ICT will heighten the cyber threat.

The House of Lords Science and Technology Select Committee has been investigating the resilience of the UK's electricity system, and whether there will be enough electricity to meet demand as the UK has reached a critical pinch point, with a squeezed surplus of electricity-generating capacity.

The inquiry also looked at the resilience of electricity supply in the face of radical changes to our electricity landscape, expected to result from advances in science and technology and the drive towards decarbonisation. The inquiry explored different ways of maintaining a resilient supply such as by increasing interconnection between different countries, new storage technologies and by giving consumers more control over how and when they use electricity.

Other key findings

Other key findings of the report include:

New and emerging threats to resilience must be identified as early as possible. Our electricity system is increasingly reliant on ICT and potential cyber-security breaches will require constant vigilance.

A flexible and agile system of demand for electricity can make a huge contribution. Giving consumers more control over how and when they use electricity has huge potential to reduce costs and improve resilience. To maximise this potential the Government must do more to optimise market conditions and progress the roll out of smart meters.

More needs to be done to establish the effectiveness of interconnection to other countries. The report calls on the Government to review how beneficial the contribution of interconnected countries could be at times of excessive need.

Flexible generation will be increasingly important to balance the electricity system. The report finds that all new generation should be built in such a way as to maximise its flexibility.

Chairman's comment

Commenting on the report, Chair of the Committee, Lord Selborne, said:

"We chose to look at this issue because, such is our increasing reliance on electricity, any blackouts have the potential to bring our communications and vital services to a grinding halt.

"The encouraging finding from our investigation is that overall, the resilience of the electricity system is robust, and witnesses told us we have the most reliable transmission network in Europe. But our report found that the Government sailed too close to the wind, allowing the capacity margin, its safety net, to be squeezed too tightly before taking last minute measures. Moreover these measures, which came at a cost to the taxpayer, were in conflict with the Government's wider aims to decarbonise electricity generation.

"We're entering new and unchartered territory. As we strive for more decarbonised electricity provision, it will become harder and harder to keep electricity affordable and to guarantee security of supply. These are the three irreconcilable pressures of the 'energy trilemma', and we feel that there is more the Government needs to do to inform the public about potential higher prices.

"We found that new technologies mean that our electricity system is undergoing immense and radical change. The report stresses that the Government must stay ahead of the game, with dedicated investment into research and development across a wide range of technologies, and constant alertness to cyber‑threats. Only then can the Government ensure that it can weather any storm, and continue to keep the lights on in the long‑term."